Incentive-based demand response programs designed by asset-light retailers for day-ahead market

摘要

Following the deregulation experience of retail electricity markets in most countries, the majority of thenew entrants of the liberalized retail market were pure REP (retail electricity providers). These entitieswere subject to financial risks because of the unexpected price variations, price spikes, volatile loads andthe potential for market power exertion by GENCO (generation companies). A REP can manage themarket risks by employing the DR (demand response) programs and using its' generation and storageassets at the distribution network to serve the customers. The proposed model suggests how a REP withlight physical assets, such as DG (distributed generation) units and ESS (energy storage systems), cansurvive in a competitive retail market. The paper discusses the effective risk management strategies forthe REPs to deal with the uncertainties of the DAM (day-ahead market) and how to hedge the financiallosses in the market. A two-stage stochastic programming problem is formulated. It aims to establish thefinancial incentive-based DR programs and the optimal dispatch of the DG units and ESSs. The uncertaintyof the forecasted day-ahead load demand and electricity price is also taken into account with ascenario-based approach. The principal advantage of this model for REPs is reducing the risk of financiallosses in DAMs, and the main benefit for the whole system is market power mitigation by virtuallyincreasing the price elasticity of demand and reducing the peak demand.